The Bank of England (BoE) has lowered its primary interest rate to mitigate the damaging economic impact of the spread of the new coronavirus.
The British central bank announced this after a special meeting. Half a percentage point reduces the interest to 0.25 percent. Besides, the BoE is presenting a new financing plan for small and medium-sized companies.
BoE policymakers agreed unanimously to the measures.
According to the central bank, lower interest rates can support confidence among consumers and businesses, now that they are under pressure due to the virus outbreak. The reduced rate must also ensure that households and entrepreneurs have sufficient access to credit.
It is the first time since August 2016 that the British have lowered interest rates. The central bank announced the decision before the official interest rate decision later this month, with which the BoE followed the example of the US Federal Reserve.
The central bank umbrella in the United States lowered interest rates in the meantime due to the economic risks associated with the coronavirus.
On Thursday, there will be an interest rate meeting of the European Central Bank (ECB). The ECB may also come up with support measures because of the virus.